China’s CNOOC Begins Oil Partner Hunt in Mexico Deep Waters

16 Sep 2017   China, Mexico

Cnooc Ltd. is searching for partners to develop oil prospects deep into the Gulf of Mexico as the Chinese giant extends its global reach. After bidding alone for exploration rights in Mexico’s first-ever deep-water auction in 2016, Cnooc is seeking deals known as farmouts, a common type of joint venture where a stake in an oil prospect is exchanged for help with drilling and production. The company has yet to choose partners, a Beijing-based spokeswoman for Cnooc said Friday. China, the world’s biggest oil consumer after the U.S., has sought a foothold in crude production everywhere from Africa to Canada as it looks to ensure supplies to its fast-growing economy. Several Latin American countries like Venezuela and Brazil have taken advantage of China’s thirst […]

China’s Economy Cools Again

14 Sep 2017   China

The pace of China’s economic expansion unexpectedly cooled further last month after a lackluster July, as factory output, investment and retail sales all slowed. Key Points Industrial output rose 6.0 percent from a year earlier in August, versus a median projection of 6.6 percent and July’s 6.4 percent. That’s the slowest pace this year Retail sales expanded 10.1 percent from a year earlier, versus a projection of 10.5 percent and 10.4 percent in July, also the slowest reading in 2017 Fixed-asset investment in urban areas rose 7.8 percent in the first eight months of the year over the same period in 2016, compared with a forecast 8.2 percent rise. That’s the slowest since 1999 Big Picture The continued cooling of the world’s second-largest economy suggests that efforts to rein in credit expansion and reduce excess capacity are hitting home ahead of the key 19th Party Congress in October. Still, […]

China’s environmental crackdown hits August metals output

14 Sep 2017   China

A worker cuts metal at a scrap metal stall at a recycling yard at the edge of Beijing, China, October 20, 2016. REUTERS/Thomas Peter BEIJING (Reuters) – China’s non-ferrous metal output fell to a one-year low in August, in a sign that Beijing’s environmental crackdown is curbing supplies of base metals, with aluminum also hit by efforts to rein in output. Production of 10 nonferrous metals – including copper, aluminum, lead, zinc and nickel – fell 2.2 percent to 4.42 million tonnes, official data showed on Thursday, the lowest in a year and the first year-on-year drop since December 2015. “I think it is definitely related to the crackdown on production that will pollute the environment,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong. The impact of China’s environmental protection campaign was also evident in weak industrial production growth, she said. China has launched an aggressive […]

With high-performance cells, China takes aim at high-end solar market

14 Sep 2017   China, Solar

China, blighted by pollution and long known for churning out cheap manufactured goods, is looking to dominate the high-end of a major growth market: solar power. Under a new program, China is pushing the industry to mass market high-performance solar cells so far used mainly in high-tech products like satellites. Making these cells more affordable will likely further boost a sector that has already disrupted global electricity generation. It will also put pressure on international solar cell makers such as Canadian Solar, REC Solar, Sharp and Sunpower which compete with Chinese leaders including LONGi Green Energy Technology, Trina Solar and JA Solar Holdings. Under its 2017 “Top Runner Program”, China’s National Energy Administration (NEA) plans to add 8-10 gigawatt (GW) of solar capacity to its existing 80 GW. “This shift … could have far-reaching implications for the global solar industry, especially vaulting China into the top […]

China’s Petrol-Powered Car Ban Could Cripple The Oil Market

13 Sep 2017   China, Electric Cars

If China, the world’s largest new vehicle market with sales of 28.03 million units last year, were to ban gasoline and diesel vehicles in the market, the impact on petroleum would be huge. But how pervasive is the fossil-fuel ban in global markets key to new vehicle sales and petroleum consumption? During an automotive forum over the weekend in Tianjin, Xin Guobin , the vice minister of industry and information technology, said the government is working on a timetable to end production and sales of fossil-fuel powered vehicles. The national government has been headed in this direction for a few years, issuing generous “new energy vehicle” subsidies to automakers to build electric vehicles and for consumers to buy them. The subsidies are being cut back this year and the government is expected to adopt a zero-emission vehicle mandate similar to California’s where automakers would be mandated to manufacture a […]

China’s war on smog chokes Shandong industries, smokes out fuel kiosks

13 Sep 2017   China, Climate

China’s crackdown on pollution is choking output of chemicals, fuels and other materials in Shandong province as plants curb or cut operations amid random environmental checks. Beijing’s clear-sky efforts are not new, but the frequency and duration of recent inspections in the industrial Shandong heartland is impacting output more extensively as small and mid-sized plants come under the same scrutiny earlier focused on large state-owned facilities. Some 30 independent oil refineries in Shandong have been shut since mid-July, plus an unspecified number of chemical plants making propylene oxide (PO),PVC and rubber tyres have been closed, according to industry sources and market analysts. Unlicensed fuel kiosks have also been removed. While some of the plants have resumed operations or are hoping to restart later this month, others are less optimistic. “We were told to prepare to work half a month and be off the other half, […]

Is Russia Pushing Saudi Arabia Out Of Asia?

13 Sep 2017   China, Russia

Chinese industrial conglomerate CEFC has agreed to buy 14.16 percent in Russia’s Rosneft for approximately US$9 billion. The deal was no surprise as it came on the heels of a Rosneft announcement regarding the sealing of a strategic partnership deal with CEFC, but it is clearly indicative of a continuing warming between Moscow and Beijing that has given the former the upper hand in a race for market share with Saudi Arabia. True, the Kingdom and Russia have been forging closer ties in recent months, thrown together by the persistent depression in international oil prices. This new coziness also shouldn’t come as a surprise. As Shakespeare put it, “Misery acquaints a man with strange bedfellows.” Russia and Saudi Arabia may be amicable for the time being, but they are competitors and the most important focus of this competition is the Chinese oil market. As Bloomberg Gadfly’s Liam Denning notes […]

BP folds Argentine assets into JV backed by Cnooc

BP has agreed to fold its Argentine assets into a new joint-venture backed by Cnooc of China in a deal that widens both groups’ interests in a country boasting some of the most promising shale oil and gas resources outside the US. Pan American Energy (PAE), an Argentine oil and gas producer 60 per cent owned by BP, will be combined with Axion Energy, one of the Latin American country’s largest oil refiners and fuel retailers, to create a new integrated energy group. The new company will be a 50-50 joint venture with Axion’s owner, Bridas Corporation, which is 50 per cent owned by state-controlled Cnooc. Bridas already owns the 40 per cent of PAE not held by BP and Axion is the primary customer for PAE’s Argentine crude oil output. BP said fully integrating the closely-connected businesses would unleash further operational synergies. No cash payments will be made by either party for the equity exchange, which BP said would create the largest private Argentine energy company. PAE accounted for 18 per cent of Argentine oil and gas production last year, with average output of 262,000 barrels a day. It operates the Cerro Dragon oilfield — the country’s largest — and also has positions in the Vaca Muerta shale region. Argentina has been attracting growing interest from global energy groups as a new frontier in the shale revolution, which has unlocked large volumes of oil and gas from “tight” rock formations in the US.

Strong overseas demand for Australia coal deprives local utilities of fuel

12 Sep 2017   Australia, China, Coal

Strong Asian demand for coal from Australia is depriving domestic power generators of fuel and driving electricity prices higher, energy providers and mining sources said. Local power companies are typically unable or unwilling to match the price premiums some Australian coal has been fetching in Asian markets, where less-polluting high energy, low emissions (HELE) plants are being introduced at a rapid rate, said three coal mining sources. Australian Newcastle thermal coal cargo prices, a benchmark for Asia, have jumped by more than 20 percent since July to over $100 per tonne on strong demand from overseas buyers. The shortage in one of the world’s top producers of the commodity comes as the nation battles to avoid blackouts that have become more frequent following a decade of uncertainty over carbon policy. The shortfall in coal is most acute in New South Wales, the nation’s most populous state, […]

China auto sales rise 5.3 pct in August

12 Sep 2017   China

China’s auto sales continued to increase in August, evidence of the steady growth of the world’s largest car market, data from the China Association of Automobile Manufacturers (CAAM) showed Monday. Some 2.19 million vehicles were sold last month, up 5.3 percent year on year, maintaining momentum in July that saw sales rise 6.2 percent. Meanwhile, 2.09 million vehicles were produced in August, up 4.8 percent from the same period last year, according to the CAAM. In the first eight months, total auto output and sales increased by 4.7 percent and 4.3 percent year on year to 17.68 million and 17.51 million vehicles, respectively. The market share of domestic brands went up 5.3 percent year on year in August, said the CAAM. Sales and production of new energy vehicles maintained fast growth. Some 72,000 new energy vehicles were produced in August, up 67.3 percent year […]

World’s Largest Car Market Turns To Electric Vehicles

12 Sep 2017   China, Electric Cars

China is preparing to announce the date from which internal combustion engine car sales will be banned, joining Norway, France, and the UK, among others, that have declared a complete shift to electric vehicles. Bloomberg quoted the country’s vice minister of industry and information technology, Xin Guobin, as saying the ministry is working with regulators on the timetable of the phasing-out. The deadline could be set for more than two decades from now, at least according to a manager from China’s biggest passenger car exporter, Chery Automobile Co. Liu Zhijia believes a deadline after 2040 is a reasonable one given the size of China’s passenger car market, leaving carmakers enough time to adjust. McKinsey reported in July that China has moved to the forefront of the EV revolution, producing 375,000 EVs last year. This constituted 43 percent of global electric car production and made China the country with the […]

The Two Nations Leading The Wind Power Race

China and the UK have teamed up to develop the next generation of offshore wind power capacity, with a focus on identifying the best locations for the new installations and making them more resilient to harsh weather conditions including typhoons and earthquakes. The UK’s Natural Environment Research Council said research teams from the two countries will work together on five projects, to receive funding from the Joint UK-China Renewable Energy program as well as financial support from NERC and the National Natural Science Foundation of China. The UK and China are among the leaders in renewable energy globally, and their new tie-up will solidify their position at the top of the clean-energy-adopters list. The UK already has the largest offshore wind capacity in Europe, and last year a quarter of all electricity generation came from renewables. China last year installed 23.4 GW of new wind capacity, which accounted for […]

China developing timetable to end sales, production of gasoline cars

11 Sep 2017   China, Electric Cars

The auto industry has now grudgingly accepted that battery-electric cars will make up some portion of the world’s new vehicles in years to come. But a milestone in that trend may have come today, in news from China. Policy makers in the world’s most populous country, and largest car market, are developing a timetable to end production and sales of vehicles with gasoline engines. DON’T MISS: UK to ban diesel, gasoline car sales by 2040; follows France, Norway, Holland bans Unlike Norway, The Netherlands, France, and the U.K., no year is yet associated with the plans, which are still being created. But as The Associated Press reported Sunday morning, the Xinhua News Agency and the Communist Party newspaper People’s Daily attributed the statement to a Chinese deputy industry minister, Xin Guobin. Speaking Sunday morning at “an auto industry forum,” the AP wrote, Xin said his ministry […]

China looks at plans to ban petrol and diesel cars

11 Sep 2017   China, Electric Cars

China wants more electric cars on the road to fight pollution China, the world’s biggest car market, plans to ban the production and sale of diesel and petrol cars and vans. The country’s vice industry minister said it had started “relevant research” but that it had not yet decided when the ban would come into force. “Those measures will certainly bring profound changes for our car industry’s development,” Xin Guobin told Xinhua, China’s official news agency China made 28 million cars last year, almost a third of the global total. Both the UK and France have already announced plans to ban new diesel and petrol vehicles by 2040, as part of efforts to reduce pollution and carbon emissions. Chinese-owned carmaker Volvo said in July that all its new car models would have an electric motor from 2019. Geely, Volvo’s Chinese owner, aims to sell one million electric cars by […]

China’s Electric Car Push Lures Global Auto Giants, Despite Risks

11 Sep 2017   China, Electric Cars

Volkswagen, the German auto giant, is preparing for a swift expansion in its output of electric cars next year — and the biggest jump in production will be in China. General Motors is making China the hub of its electric car research and development. Renault-Nissan , the French and Japanese carmaker, and Ford Motor have hustled to set up joint electric-car ventures in China. Global automakers see the future of electric cars, and it looks Chinese. The biggest players are shifting crucial scientific and design work to China as the country invests heavily in car-charging stations and research and pushes automakers to embrace battery-powered vehicles. China underscored that ambition over the weekend, when it said it would eventually ban the sale of gasoline- and diesel-powered cars at an […]

China invests $9.1 billion in Rosneft as Glencore, Qatar cut stakes

9 Sep 2017   China, Russia

Chinese conglomerate CEFC will buy a 14.16 percent stake in Russian oil major Rosneft for $9.1 billion from a consortium of Glencore and the Qatar Investment Authority, strengthening the energy partnership between Moscow and Beijing. CEFC China Energy has grown in recent years from a niche oil trader into a sprawling energy conglomerate and the transaction will allow China, the world’s second largest energy consumer, to boost cooperation with the world’s top oil producer. The deal comes as the United States imposes a new round of economic sanctions on Russia, making it difficult for large Western firms such as Glencore to develop partnerships and increase ties with state-owned firms such as Rosneft. Glencore said in a statement that CEFC will buy shares at […]

China Purchases 14% Of Rosneft From Qatar

9 Sep 2017   China, Russia

The $9 billion purchase will transfer the Qatar Investment Authority’s 14.16 percent Rosneft stake to CEFC China Energy Company Ltd., Glencore said on Friday. China bought the shares at a 16 percent premium to the Rosneft share price over the past month. Final negotiations and regulatory approvals are needed before the exchange goes through, however. “This deal intensifies the energy relationship between Russia and China. A direct stake in Rosneft will make CEFC China the main driver for the relationship of Rosneft with China, ahead of CNPC, Sinopec and Beijing Gas,” Wood Mackenzie senior analyst Christian Boermel said. “Rosneft keeps its customers close to its heart – buy a stake, get an oil supply agreement. CEFC China could soon take stakes in Rosneft projects, either in cash-intensive upstream projects, or in the downstream.” The Russian government will continue to own a majority stake of Rosneft after […]

China invests $9.1 billion in Rosneft as Glencore, Qatar cut stakes

9 Sep 2017   China, Qatar, Russia

Chinese conglomerate CEFC will buy a 14.16 percent stake in Russian oil major Rosneft (ROSN.MM) for $9.1 billion from a consortium of Glencore (GLEN.L) and the Qatar Investment Authority, strengthening the energy partnership between Moscow and Beijing. CEFC China Energy has grown in recent years from a niche oil trader into a sprawling energy conglomerate and the transaction will allow China, the world’s second largest energy consumer, to boost cooperation with the world’s top oil producer. The deal comes as the United States imposes a new round of economic sanctions on Russia, making it difficult for large Western firms such as Glencore to develop partnerships and increase ties with state-owned firms such as Rosneft. Glencore said in a statement that CEFC will buy shares at a premium of around 16 percent to the 30-day volume weighted average price of Rosneft shares without naming the price. A […]

China Declares Support For Punitive Action Against North Korea

8 Sep 2017   China, North Korea

The United States has proposed an oil embargo against North Korea enforced by the United Nations after Pyongyang authorized nuclear tests that violated several UN resolutions. Yi encouraged the global community to reach a consensus on a strategy to deescalate the North Korean nuclear program and eventually invite Pyongyang into international diplomatic circles. In additional to the oil embargo, the U.S. wants to see North Korean textiles exports banned and create a barrier to the hiring of North Korean workers abroad, Reuters said. North Korea depends on China for 90 percent of its crude oil supply. Stopping shipments to its neighbor will wreak havoc on Kim Jong Un’s dictatorship, which China has been trying to avoid. A regime collapse is likely to result in a massive influx of refugees. Beijing has also opposed President Donald Trump’s push to penalize North Korea for the nuclear tests so far, but the […]

Chinese conglomerate in talks over Rosneft investment

6 Sep 2017   China, Russia

CEFC China Energy is in talks to invest in Russia’s state-controlled oil company Rosneft, in what would be a sign of strengthening economic co-operation between Moscow and Beijing even as relations with the US deteriorate. CEFC, a private conglomerate with interests in the energy and financial services industries, has been negotiating a deal to invest in the world’s largest publicly listed oil producer that could be announced as soon as this week, according to four people with knowledge of the talks. If agreed, the complex agreement would mark a growing corporate relationship between China and Russia that has focused on cross-border energy deals. This has strengthened this year against the backdrop of increasingly acrimonious ties between Moscow and the west, involving sanctions levied against big Russian companies including Rosneft.  “Rosneft sees this as a good idea for both strategic and simple business reasons. With the current tensions with the US, they can use it to show that there are other places to find friends. And it shows pragmatism in terms of taking the money where it is available,” said one of the people, who was not permitted to speak to the media. As part of the talks, CEFC is in discussions with independent Russian oil company NNK, headed by former Rosneft chief executive Eduard Khudainatov, to form a joint venture related to the investment, three of the people told the FT on condition of anonymity.

China’s Shangdong independent refineries plan to consolidate; analysts skeptical

4 Sep 2017   China

Independent refineries holding crude import quotas in China’s Shangdong province are planning to consolidate into a single corporate entity, a move that would help to optimize their entire value chain, from feedstock purchases to products marketing, which in turn will strengthen their competitive edge. An official document from the Shandong Economic and Information Technology Committee on Friday said that SEITC, on behalf of the provincial government, had approved the setting up of Shandong Refining Energy Group Corp., a proposal which was brought up by the Shandong Oil Refining Association, an independent organization. Shandong Oil Refining Association could not be contacted for comments on Monday. While no time period has been mentioned for setting up the corporation, Dongming Petrochemical and Qingyuan Petrochemical are expected to be the two initial members of the new refining corporation, the document said. The proposal has thrown open an invitation to other independent refineries holding […]

China’s new energy vehicle industry on fast lane for growth

4 Sep 2017   China

China’s new energy vehicle (NEV) industry has seen rapid growth in the past few years, with growing sales and an improved industry ecosystem, according to an industry association. Production and sales of NEVs have surpassed 1 million units so far, with an annual growth rate of over 200 percent, said Dong Yang, vice director of China Association of Automobile Manufacturers (CAAM). With more than 50 percent of the world’s NEV production, sales, and ownership in 2016, China is now a global leader in NEV development. Domestic battery makers, motor producers, and other enterprises in the supply chain have become internationally significant suppliers, with more than 70 percent of the global shipments of NEV batteries coming from China, Dong said. Public charging facilities within China have surpassed 180,000, with their coverage increasing in residential areas, along highways, and in other public space. Companies operating NEV […]

China’s state oil refiners seek higher fourth quarter fuel export quotas as margins surge: sources

31 Aug 2017   China

Site of an oil field is seen at sunset in Karamay, Xinjiang Uighur Autonomous Region, China, May 7, 2017. Picture taken May 7, 2017. Stringer BEIJING/SINGAPORE (Reuters) – China’s state-owned oil refiners are seeking extra oil-product export quotas for the fourth quarter to reap higher overseas profits and to offload surplus supplies, said three sources with knowledge of the matter on Thursday. Chinese state refiners submitted their requests to the Ministry of Commerce two weeks ago, requesting for extra quotas as some of them have used up most of their allocated volumes in August, the sources said. “We are requesting for quotas to export more jet fuel and gasoline to meet demand in other parts of the Asia,” said one of the sources, an official from a state refiner who declined to be named as he is not authorized to speak with the media. A ramp-up in Chinese fuel […]

China’s electric-car sales now twice those in US for Jan-June 2017

31 Aug 2017   China

2016 BYD Tang plug-in hybrid SUV, made in China Hard numbers provide the latest evidence that shows China is by far the world’s largest market for plug-in cars—or new energy vehicles, as they are referred to locally. The latest round of sales figures show the Chinese bought almost exactly twice the number of plug-in vehicles as car buyers in the United States did. Despite the high figures, sales had slowed during the month of January due to the fewer subsidies from the Chinese government. DON’T MISS: Plug-in electric car sales for June: Volt passes Prius Prime, Bolt EV rises again In total, Chinese buyers purchased 181,200 battery electric and plug-in hybrid vehicles through June of this year. U.S. car buyers purchased 89,256 plug-in cars in comparison, according data from InsideEVs cited in the summary on ChargedEVs . The total number of plug-in cars sold in China was 42 percent […]

Power of love: China’s latest arranged match rattles utilities

30 Aug 2017   China, Coal

Beijing announced its latest arranged marriage by matching the country’s top coal miner with one of its biggest utilities to create a global powerhouse worth $280 billion on China’s Valentine’s Day. But even as couples across the country celebrated the Qixi Festival, the union may spark jealousy elsewhere. Other power companies fear they will lose critical thermal coal supplies just months ahead of winter and face a bigger rival with an outsized role in the market. After a months-long courtship, China’s State-owned Assets Supervision and Administration Commission (SASAC) announced the deal to combine the nation’s largest coal miner Shenhua Group Corp Ltd [SHGRP.UL] with one of its biggest utilities China Guodian Corp [CNGUO.UL] in a statement on Monday. The new entity will eclipse EDF (EDF.PA) and Enel (ENEI.MI) to become the biggest global power company with around 225 gigawatts of capacity. The deal is also expected […]

The Aramco IPO: A Geopolitical Game Of Thrones

29 Aug 2017   China, Saudi Arabia

The already strong bilateral relations between Saudi Arabia and China are hitting new levels, as the Kingdom and the Chinese Tiger have decided to set up a joint US$20 billion investment fund. The fund was announced by Saudi minister of energy Khalid Al Falih, after meeting with Chinese vice-prime minister Zhang Gaoli in Jeddah. Falih indicated that both countries will share the total investments and will be splitting the revenues of the fund, which is going to target projects in infrastructure, energy, mining and materials. This is not a surprise, as Saudi Arabia has already been heavily investing in energy and petrochemicals in China the last decades. Saudi Aramco’s main downstream investments lately almost all have been focusing on increasing the Saudi footprint in downstream China, mainly to lock in Chinese demand for crude and products. Falih also reiterated that both countries will sign around $20 billion in value […]

China set to create world’s top utility with latest government merger

29 Aug 2017   China

A worker fixes the company logo of China Guodian Corp at a building in Beijing, China January 24, 2013. Picture taken January 24, 2013.Stringer BEIJING (Reuters) – China Guodian Group Corp [CNGUO.UL], among the country’s top five state power producers, will merge with coal giant Shenhua Group Corp Ltd [SHGRP.UL], in a deal that will create the world’s largest power utility. The companies have been in talks about a merger for several months as Beijing aims to shake up its indebted and inefficient state sector, streamline the number of companies and create globally competitive firms in sectors including power generation, shipping and metals. The Guodian-Shenhua deal was announced on Monday by China’s State-owned Assets Supervision and Administration Commission (SASAC) in a one-line statement that gave no other details. Sources say the new company will be called National Energy Investment Group. The combined entity would have an installed capacity topping […]

Renault-Nissan Alliance to Produce Electric Vehicle in China

29 Aug 2017   China, Electric Cars

Nissan Motor Co. NSANY -0.10% and alliance partner Renault SA RNO -2.00% are teaming up with Chinese auto maker Dongfeng Motor Group Co. DNFGY -3.62% to make a battery-powered automobile in the world’s biggest car market, where electric-vehicle sales are expected to rise. The joint venture, unveiled Tuesday, plans to produce a small sport-utility vehicle at Dongfeng’s plant in Shiyan in 2019, the Renault-Nissan alliance said. The vehicle will be based on an SUV platform developed by the alliance, it said. Global car makers have been searching for local partners for EV production in China, whose government intends to require auto companies to devote a certain percentage of production to battery-powered vehicles. Last week, Ford Motor Co. announced a similar joint-venture deal involving such vehicles. Chinese […]

Sinopec half-year profit rises 41 percent to $4 billion

28 Aug 2017   China

China Petroleum and Chemical Corp, known as Sinopec, reported its best six-month profit since the second half of 2014 on Sunday, the latest Chinese state oil major to report a surge in results due to a big recovery in crude prices from last year. The country’s largest refiner reported a first-half net profit attributable to equity shareholders of 27.1 billion yuan ($4.08 billion), up 40.7 percent on a year prior, based on Chinese accounting standards. Revenue for the period rose 32.6 percent to 1.166 trillion yuan. Profit rose 40.1 percent to 27.92 billion yuan during the period based on international accounting standards. The company attributed the strong performance to higher prices and sales of downstream products compared to the year-earlier period. The data […]

The Big Name in Coal’s Resurgence: China

28 Aug 2017   China, Coal

A coal ship pulls up to the piers in Newport News, Va. China’s reemergence as a coal importer has boosted the fortunes of U.S. producers who are now shipping more coal abroad than any time in the last two years. The trend has helped solidify a business that at the beginning of last year was suffering through a spate of bankruptcies and threatened with more. Revenue at publicly traded U.S. coal companies grew 19% in the first half of this year compared with the same period a year ago, and the biggest gains came at companies helped the most by exports, according to data compiled by Doyle Trading Consultants, a coal-market-analysis firm. That growth comes at a time when President Donald Trump has vowed to end a long decline in the U.S. coal business. Hundreds of mines have closed in recent years largely because of increasing competition from other […]

China’s Markets Can’t Agree on How Good Nation’s Economy Is

28 Aug 2017   China

Buildings under construction in Beijing. Some economists say recent weakness in China data is temporary, due to an unusually hot summer building season. SHANGHAI—China’s financial markets are sending conflicting signals about the health of the world’s No. 2 economy, where a strengthening currency, buoyant stocks and soaring commodities contrast with the pessimism popular among the country’s bond investors. The country’s latest economic data have made the picture even murkier, with the pace of industrial output, retail and housing sales and investment growth all decelerating in July . Some economists, however, argue the weakness was temporary and due to an unusually hot summer that affected construction work. A closer look suggests bond investors’ cautious outlook may win out. That is because the recent rally in other asset classes has come partly thanks to policies designed to preserve financial stability ahead of a key Communist Party political meeting this fall, and […]

Kuwait says oil shipments to China stable

26 Aug 2017   China, Kuwait

Kuwait says that even though China is importing more oil, its exports to the world’s second-largest economy were stable. File Photo by tcly/Shutterstock Aug. 25 (UPI) — Though overall Chinese imports of crude oil jumped more than 10 percent, OPEC-member Kuwait said its exports to the second-largest economy remained stable Kuwait is a member of the Organization of Petroleum Exporting Countries and helps steer a committee monitoring a multilateral effort to trim the global surplus of crude oil through managed production declines. Kuwait produced 2.7 million barrels of oil per day in July, putting it at the No. 5 spot behind the United Arab Emirates. The official Kuwait News Agency, known also as KUNA, said oil exports for the first seven months of the year averaged 321,000 barrels per day, unchanged from the previous year. Compared with last July, however, Kuwait exported 19.7 percent fewer barrels to China. Russia […]

Venezuela’s PDVSA negotiating Curacao refinery lease, open to China partners

26 Aug 2017   China, Curacao, Venezuela

Venezuelan state oil company PDVSA on Thursday said on Friday it was negotiating the continuation of its lease of Curacao’s Isla refinery but was open to Chinese partners following a preliminary deal between the island and China’s Guangdong Zhenrong Energy to operate the complex. PDVSA has for decades operated the refinery, which opened in 1918, under a lease agreement. But the cash-poor company has been reluctant to invest some $1.5 billion that Curacao authorities requested several years back to modernize the 335,000 barrels-per-day facility. China’s Guangdong Zhenrong Energy Co, a commodity trader with strong backing from Beijing, signed a binding framework pact with Curacao’s government in November. If the deal goes ahead, the Chinese firm would replace PDVSA […]

Forget OPEC, China Controls Oil Prices

24 Aug 2017   China, OPEC

U.S. shale has taken a lot of headline space recently as the biggest headwind for oil prices and the highest stumbling block for OPEC’s efforts to prop them up by cutting production. Yet, there may be another factor that could bring down oil prices as soon as next year… China. China has been building a strategic crude oil reserve for the last decade, but the size of that reserve remains undisclosed, with analysts making estimates based on China-bound cargoes and satellite imaging. Last year, a Silicone Valley tech company, Orbital Insight, suggested that China may have stored as much as 600 million barrels of crude by May. This was the highest reserve estimate at the time. Since then, the reserve has in all likelihood grown, possibly exceeding the U.S. SPR, which stood at 678.9 million barrels as of August 18th this year. This year, Chinese crude imports have run […]

Exclusive: In China, the Party’s push for influence inside foreign firms stirs fears

24 Aug 2017   China

Late last month, executives from more than a dozen top European companies in China met in Beijing to discuss their concerns about the growing role of the ruling Communist Party in the local operations of foreign firms, according to three people with knowledge of the discussions. President Xi Jinping’s efforts to strengthen the party’s role throughout Chinese society have reached the China operations of foreign companies, and executives at some of those entities don’t like the resulting demands they are facing. The presence of party units has long been a fact of doing business in China, where party organizations exist in […]

Typhoon Hato batters Hong Kong, streets flooded, flights canceled, trading halted

23 Aug 2017   China, Climate

Waves triggered by Typhoon Hato are seen in Hong Kong, China August 23, 2017. HONG KONG (Reuters) – Typhoon Hato, a maximum category 10 storm, slammed into Hong Kong on Wednesday lashing the Asian financial hub with destructive winds and waves which uprooted trees, flooded streets and forced most businesses to close. More than 400 flights were canceled, financial markets suspended and schools closed as Hato bore down on the city, the first category 10 storm to hit Hong Kong since typhoon Vicente in 2012. Many skyscrapers in the heart of the financial center were empty and in darkness as the city’s workers stayed at home and hunkered through the storm. Hato churned up Hong Kong’s iconic Victoria Harbour and triggered large swells and massive waves on some of the city’s most popular beaches, with serious flooding in low-lying areas. In residential districts like Heng Fa Chuen on densely […]

China July trade with North Korea slows from June as coal ban bites

23 Aug 2017   China, Coal, North Korea

China’s trade with North Korea fell in July from a month earlier, data showed on Wednesday, as a ban on coal purchases from its isolated neighbor slowed imports amid growing pressure from the United States to rein in Pyongyang’s missile program. The world’s second-largest economy imported and exported goods worth $456 million in July, down from $489 million in June, according to data from China’s General Administration of Customs. It was up from $426 million in July last year, according to data on the customs website. Year-to-date, trade was up 10.2 percent at $3.01 billion. The data indicates that China’s move to halt North Korean coal imports in February has crimped Pyongyang’s ability to raise hard currency through exports. Iron ore arrivals from North Korea in […]

Russia remains China’s top oil supplier for fifth month in a row in July

23 Aug 2017   China, Russia

Russia held its spot as China’s top crude oil supplier for a fifth month in a row in July, with shipments up 54 percent over a year earlier, data showed on Wednesday. Russian shipments last month came in at 4.97 million tonnes, or about 1.17 million barrels per day (bpd), the General Administration of Customs said in a more a detailed breakdown of commodity trade data released on Aug. 8. For the first seven months of the year, Russia’s volumes to China grew nearly 16 percent year-on-year to 34.22 million tonnes, or 1.18 million bpd. China bought a total of 34.74 million tonnes of crude oil in July, or about 8.18 million bpd, down from June but still up about 12 percent from a year earlier. Imports in the first seven months grew 13.6 percent year-on-year to 247 million tonnes, or 8.51 million bpd, Saudi Arabia […]

North American exodus at PetroChina sparks speculation of company shift

23 Aug 2017   China, North America

A flurry of departures across the U.S. and Canadian units of Chinese state energy firm PetroChina Co Ltd  have sparked speculation that the oil trader is reducing its presence in North America, even though the company says it is committed to the region. More than 30 people in its Houston and Calgary offices have left PetroChina since 2016, including heads of desks in crude, financial, natural gas and chemical trading, the company confirmed to Reuters. Sources say that PetroChina had approximately 150 to 200 people at its peak two to three years ago, and now has between 100 and 150. Nearly a dozen sources in New York, Calgary, Houston and Singapore, including current and former employees, told Reuters the departures suggest a shift in mindset […]

Coal price surge justified by China’s dynamics, for now

21 Aug 2017   China, Coal

How much of the current surge in thermal coal prices in Asia is because of a fundamental shift in the supply-demand balance, and how much is down to speculative froth? This is a question often asked when a commodity experiences a strong gain – or drop – in price, especially when the fundamentals don’t appear to have shifted that much, at least on a casual view. Virtually everybody in the coal industry can agree that the strong performance in seaborne thermal coal this year is being driven by market dynamics in top importer China. What’s harder to work out is whether this rally will run out of steam or whether there has been a structural change in the market. The argument for a structural change in China […]

China sees apparent natural gas consumption rising by 10 pct in 2017

19 Aug 2017   China, LNG

China expects its apparent natural gas consumption to rise over 10 percent year-on-year to around 230 billion cubic meters (bcm) this year, the official Xinhua news agency said on Saturday citing a report from the National Energy Administration. The country’s apparent natural gas consumption reached 114.6 bcm in the first half of this year, up 15.2 percent from the same period a year earlier.

Booming thermal coal price on China demand cheers miners

17 Aug 2017   China, Coal

Australian thermal coal prices for spot cargoes above $100 a tonne, lifted by reports of strikes and strong Chinese demand, are providing a boost in earnings and share prices for miners like Glencore and Whitehaven Coal. A crackdown on illegal mining and pollution in China has curbed domestic supplies, just as a heat wave and lower hydro power output have boosted demand for coal for power generation, forcing up prices. A similar squeeze in 2016 pushed prices to $114 a tonne and miners are again eyeing windfall profits, despite warning that the market is volatile. “Coal demand remains strong, especially in Asia,” said Paul Flynn, managing director of Whitehaven Coal. “Imports of thermal coal into China have been higher than anticipated, and when combined with weather related constraints on supply from Indonesia and some production issues in Australia, have pushed up the price of seaborne thermal […]

Prominent China debt bear warns of $6.8tn in hidden losses

17 Aug 2017   China

One of the most influential analysts of China’s financial system believes that bad debt is $6.8tn above official figures and warns that the government’s ability to enforce stability has allowed underlying problems to go unchecked. Charlene Chu built her reputation as China banking analyst at credit rating agency Fitch, where she was among the earliest to warn of risks from rising debt, especially in the country’s shadow banking system. Today many of her original views — such as concern about Chinese banks concealing risky credit in off balance sheet vehicles — have become consensus among analysts. “Everyone knows there’s a credit problem in China, but I find that people often forget about the scale. It’s important in global terms,” Ms Chu said in an interview by phone from New York. Ms Chu left Fitch in 2014 to help launch the Asia operation for Autonomous Research, which specialises in analysis of financial institutions. In her latest report, Ms Chu estimates that bad debt in China’s financial system will reach as much as Rmb51tn ($7.6tn) by the end of this year, more than five times the value of bank loans officially classified as either non-performing or one notch above. That estimate implies a bad-debt ratio of 34 per cent, well above the official 5.3 per cent ratio for those two categories at the end of June. Charlene Chu was one the first analysts to warn of risks from China’s rising debt

China’s energy demand to peak in 2040 as transportation demand grows: CNPC

16 Aug 2017   China

China’s energy demand will peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption continues to rise through the middle of this century, state-owned oil major China National Petroleum Corp (CNPC) said on Wednesday. Energy consumption in China, the world’s second-largest economy, will peak then at 4.06 billion tonnes of oil equivalent, up from the previous forecast of 3.75 billion tonnes five years prior, CNPC said in its annual long-term energy outlook. CNPC raised its forecast because it predicts transportation demand will rise through to 2050, twenty years longer than previously estimated. China’s oil demand will reach a ceiling of 690 million tonnes a year, equivalent to 13.8 million barrels per day (bpd), by 2030, CNPC said. The country is the […]

Oil Prices Slip As Chinese Crude Demand Loses Momentum

15 Aug 2017   China, Prices

Slowly but surely, what we have claimed for the past year – that it is the demand side of the oil equation, not the supply, and especially the “Chinese wildcard” that is the critical factor in setting prices – is starting to emerge and be factored in by markets. And so, just days after we posted ” Another Red Flag For Oil? China’s Crude Imports Slump To 7-Month Low ” arguably catalyzed by the increasingly full Chinese Strategic Petroleum Reserve, overnight we got another major red flag – once again out of China – when Bloomberg reported that China’s oil refining dropped the most in three years for the month of July, while crude output retreated from the highest this year, “as the world’s largest consumer showed signs of losing momentum.” According to Bloomberg calculations based on NBS data released on Monday, as shown in the chart below oil […]

China’s Refineries Run Rates At 10-Month Low

15 Aug 2017   China

At 10.71 million bpd, China’s crude refineries saw in July their lowest daily throughput rate since September last year as state firms and independent refineries, both swimming in inventory, continue to duke it out with price as their weapon. According to data released by China’s National Bureau of Statistics (NBS) on Monday, reported by Reuters , China processed 10.71 million bpd of crude in July—500,000 bpd lower than the throughput in June. But between January and July, Chinese refinery production increased by 2.9 percent annually to 320.7 million tons, equal to a rate of 11.04 million bpd, Reuters reports, as per official statistics data. In June, Chinese refineries had processed 11.21 million bpd of crude oil, up by 2.3 percent on the year and the second-highest daily processing rate on record. The highest daily rate was hit last December, when refineries processed 11.26 million bpd. However, state refiners have […]

China’s appetite for crude oil may become less voracious:

15 Aug 2017   China

The sharp slowdown in China’s refinery processing in July may be another warning sign that the robust growth in crude oil demand this year in the world’s top importer is poised to moderate. Refinery throughput was 45.5 million tonnes of crude in July, or about 10.71 million barrels per day (bpd), the lowest operating rate since September last year, and a drop of 500,000 bpd from June. For the first seven months of the year, refinery runs were 11.04 million bpd, up 2.9 percent from the same period last year. While this is still a reasonable year-on-year growth rate, it does contrast with the strong 13.6 percent increase in imports of crude in the first seven months of this year, compared […]

Cheniere Energy sets up China office to expand sales: sources

15 Aug 2017   China, LNG

U.S. natural gas exporter Cheniere Energy Inc is setting up an office in Beijing to help it clinch long-term supply deals with Chinese buyers, four industry sources said. Cheniere, which held extensive talks with China earlier this year, will be the first operator of a U.S. liquefied natural gas (LNG) export facility to establish a presence in the country. The move follows an agreement in May between the U.S and China to boost trade under the so-called 100-day trade talks that will allow Chinese buyers to purchase long-term supplies from the U.S. directly. World LNG demand is expected to double to about 71 billion cubic feet per day (bcfd) (544 million tonnes a year) by 2040, up from around 32 bcfd in 2015, the U.S. Energy Department estimates, driven by the rapidly growing economies of Asia, particularly China and India. Cheniere is currently the only company […]

Drilling ship leaves Vietnam oil block after China row

14 Aug 2017   China, Vietnam

The drilling ship at the center of a row between Vietnam and China over oil prospecting in disputed waters in the South China Sea has arrived in waters off the Malaysian port of Labuan, shipping data in Thomson Reuters Eikon showed on Monday. Drilling by the Deepsea Metro I ship was suspended in Vietnam’s Block 136/3 last month after pressure from China, which says the concession operated by Spain’s Repsol overlaps the vast majority of the waterway that it claims as its own. The ship, used by Norway’s Odfjell Drilling Ltd., was reported to be in Labuan at 9.17 a.m. (0117 GMT), according to shipping data in Thomson Reuters Eikon. It was last recorded at the drilling site on July 30. Odfjell Drilling did not respond immediately to a request for comment. The row over the drilling inflamed tensions between Vietnam and China, whose claims in […]

China approves plan to promote unified nuclear reactor brand

14 Aug 2017   China, Nuclear

China has approved a plan from its two state nuclear developers to promote a single integrated nuclear reactor brand that will help speed up construction and strengthen their ability to compete in markets overseas. China is in the middle of an ambitious nuclear program that could bring total capacity to as much as 200 GW by 2030, and it also aims to win more projects abroad. But approvals have been slow with a variety of new advanced reactors subject to repeated delays. The China National Nuclear Corporation (CNNC) and the China General Nuclear Project Corporation (CGN) have been jointly developing an advanced model known as the “Hualong One”, but despite government pressure, they have continued to work separately on their own designs. In a plan approved by regulators last week, the two companies agreed to use integrated technical standards when building Hualong reactors. They will also […]